Employer confidence in the UK economy has slid into negative territory despite a buoyant jobs market, research from the Recruitment & Employment Confederation (REC) has found.
The agency found that 31% of employers expect the economy to worsen with just 28% expecting it to improve. The net balance in the survey has fallen from +6 to -3 over the last month.
However, companies are still recruiting, with around one in five, or 19%, planning to increase their headcount over the next three months. Although confidence in making hiring and investment decisions remains positive at a net balance of 10%, this is the lowest figure in the past year.
Added to this, the GfK consumer confidence index has fallen to -12, a post EU referendum low.
REC chief executive Kevin Green said: ‘The jobs market continues to do well despite growing uncertainty. However, this drop in employer confidence should raise a red flag.
‘Businesses are continuing to hire to meet demand, but issues like access to labour, Brexit negotiations and political uncertainty are creating nervousness. Employers in the construction sector are especially concerned as they rely heavily on EU workers to meet the growing demand for housing and to support the government’s infrastructure plans.
‘The added factor of dropping consumer confidence is putting some businesses on edge. If people reduce their spending, businesses will be impacted.’
Green called for the government to provide clarity on the future shape of Brexit and whether they can hire in EU workers, adding that companies can only invest if they ‘feel assured for the future’.